shannon: next on "special report" as president obama prepares his eulogy for senator edward kennedy, there are questions about when anyone else can reach across the aisle and get healthcare legislation passed. the president wants to save money by cutting down on medical testing, but who decides who can't get tested? dick cheney lashes out at the administration's investigation of c.i.a. interrogators, and a look at the order that some u.s. troops in afghanistan are refusing to follow. all that, plus the fox all-stars an and friday lightning round. "special report" starts right now. welcome to washington. i'm shannon bream in tonight

for bret baier. memorials for the late senator kennedy continue. president obama will speak at tomorrow's fiewn al mass and major garrett reports that kennedy's death has left a void that could hamper the president's healthcare reform efforts. >> as the public morning continued, president obama worked on his eulogy on martha's vineyard conferring with his top advisor, david axelrod. the president has immersed himself in his vacation, setting aside the healthcare debate for a bike ride along the beach, a fried shim p lunch and a look from the white house. if he was looking for a deal maker, clout and timing, kennedy's death may have left mr. obama adrift. >> he was the only person who could go to the republicans an cut the deal and come back to the left and say this is good enough. we should take this. this might be all we can get right now. they would believe him. they would follow him and get

in line behind him. >> mcmahon worked for howard dean, whose 2004 run for the white house reanimated the slumbering left. in the '80's he worked on the senate staff to get compromise. >> there were no deal makers anywhere near what senator kennedy was. >> senator dodd and claire miscass skill said his missing all year long complicated the healthcare politics. some wonder whether kennedy really could have won republican converts. >> i know some are now saying if only senator kennedy was alive, then maybe we would have more conservative support for the healthcare bill. i don't think that's true. >> what kennedy could have accomplished will never be known. democrats agree the burden now falls to m obama to strike a deal and smaik it stick. >> it up to the president after he comes back from his kayvation to take a stance and take ownership of this

bill to define what he wants. does he want a public option? does he want an employer mandate? and to guide this toward a smooth landing is critical. >> the president's grassroots army has a new slogan for healthcare rallies across the country "let's get it done. " the problem is that no one in the party knows what "it" is because the legislation remains so vague, a situation that some say senator kennedy would have never tolerated this late in the game. major garrett, fox news. shannon: today massachusetts governor duvall patrick commented on senator kennedy's position expressed in a letter last week that state law should be changeed to allow the appointment of an interim senator before a special election. >> i think senator kennedy's respect for our current law which provides for a special election in times like these is right, so we should have the special election. i think it is requested that the governor be authorized to appoint someone in the interim for the five months between

now and the special election is quite reasonable. >> patrick says if the legislature changes the law, he would sign it. it was kennedy who supported the special election law in 2004 to prevent then governor mitt romney, a republican, from appointing a successor if john kerry had won the presidency. governor patrick also indicated that senator kennedy's widow, victoria, is unlikely to seek the appointment. a private memorial service for senator kennedy is scheduled to begin in about an hour in boston. david lee miller watched today as thousands paid their last respects. >> they arrived before dawn at the j.f.k. high barry to view the closed -- scwvment fk library to jew the cassette -- to view the casket, and while all wanted to pay respects, many had a personal connection to the senator. for mourner christine larue, she fought back tears as they talked about how kennedy helped her avoid losing her home. >> i was able to call him and

he helped with that situation so that we were able to keep the house. it is just so important. we would have been homeless. >> most of the mourners say they can't recall a time when ted kennedy wasn't their senator. his 47-year career spaned generations. this woman carried with her a precious family memento. >> this has been in my family for 47 years. it was my mother's poster and she worked for him on his first campaign. i'm here on her behalf. she passed five and a half years ago. >> members of ted kennedy's family including his widow victoria personally greeted the mourners. his youngest son patrick, now a long island congressman was moved about what people said about his father. >> every individual has their own personal story they want to tell, and having impacted all these people over the course of 50 years, it is just incredible to see the impact he has had on so many individual lives. >> some barely knew the

senator but knew enough to understand the importance of being here today. >> most of the family is gone, like kennedy -- like robert and john, but he is going to feel good once he's up in heaven with his bothers. >> as you might be able to tell, it is now starting to rain here in boston. in less than one hour's time, an invitation-only memorial service is going to get underway. celebration of ted kennedy's life. among those speaking, vice president joe biden and the senator's good friend, christopher dodd of connecticut, but there will also be a number of senators from across the aisle who will be speaking. among them, orrin hatch and john mccain who, in the last few days called ted kennedy, a joyful war your, someone who always kept his word. shannon: david lee, thank you.

we will have continuing coverage for senator kennedy right after "special report" at 7:00 eastern and full coverage of saturday's funeral and burial beginning at 10:00 a.m. eastern tomorrow. one of the senator's signature causes was healthcare reform. one of president obama's trouble spots in that effort is coming up with a way to pay for it. he says cutting down on wasteful procedures would go a long ways towards that. mike emanuel reports just what qualifies as an unnecessary test or treatment is very much in the eye of the beholder. >> are you having a bunch of tests ordered that are unnecessary? getting a bunch of treatments that are unnecessary? >> president obama says focus on what is important and add an ounce of prevention. >> things like ma'am gams an cancer screening, common sense measures that will save us billions if in future medical costs. >> it seems reasonable that unnecessary tests might catch

disease early enough to cut medical procedures down the line, or maybe not. >> when you talk about prevention that involves visiting a doctor and stumbling on to a high cholesterol that you didn't know about or a high blood pressure, that kind of medical prevention almost inevitably leads to more things being done, more medications being prescribed. >> after more tests, a patient with high cholesterol could be prescribed a at that statin whih might reduce his chance of a heart attack, but because only one man out of a thousand might suffer a heart attack, that ounce of prevention could be too costly. >> if you're looking at a population of men, for example, for every life you save, it costs about $150,000 to exten life by one year in terms of statin use. >> take prostate cancer, and p.s.a. screenings sensitive enough to detect cancers that may never even impair patients but doctors can't pre-dith

which are harmless -- can't predict which are harmless and which are deadly, meaning raid quag may leave some of those with harmless cancers feeling worse than if they have never been treated. there is one ounce of prevention that everyone agrees will cut costs -- exercise, cut down on cigarettes and alcohol and watch your diet that. is easier said than done. some lawmakers working on healthcare legislation believe the only way to accomplish those behavioral changes is to reward them. >> if there is a real incentive, once you get people into it, they like it. i am feeling better. i'm active. >> there are other problems with preventive care. how do you change a patient's attitude that my test is important but not the ones for the guy down the hall? will government healthcare mean rationing of tests? doctors say without tort reform they will continue to order unnecessary tests to avoid lawsuits. finally, the head of the congressional budget office says the widespread use of

preventive services will exceed the savings from prevented illness. shannon: the c.d.c. says 555 people have died from the h1n1 flu in the u.s., up from 522 last week. almost 9,000 people have been hospitalized, an increase of about 1,000. if you find lost money, it is probably a dollar or two, but when the top taxpayer in the house of representatives finds money of his own, it runs into millions, and some say that president obama should ask for help from c.i.a. agents, instead of depositions.

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shannon: former vice president dick cheney has come out swinging at the obama administration, upset over the criminal investigation over alleged abuses by c.i.a. interrogators. catherine herridge has the

story. >> the approach of the obama administration -- >> the former vice president's comments, his first since the internal c.i.a. investigation of the enhanced interrogation program was declassified this week will stoke the political fires. in an interview with fox news sunday host chris wallace, mr. cheney takes aim at attorney general eric holder and his decision to investigate and possibly prosecute a small number of c.i.a. employees and contractors whose cases have already been reviewed by career prosecutors. >> we had a track record now of 8 years of defending the nation against any further mass casualty attacks from al qaeda. the approach of the obama administration should be to come to those people that were involved in that policy and say how did you do it? what were the keys to keeping the country safe over that period of time? instead,er there's threatening to disbar the lawyers who gave us the legal opinions, threatening contrary to what the president originally said that they will go out and investigate the c.i.a. personnel who carried out

those investigations. >> two of the three documents cheney said would show the value of the interrogation program are now declassified. while neither document produced by c.i.a. analysts specifically mentions waterboarding, they provide a public account of the intelligence gained by high value detainees. khalid mohammed, the self described architect of 9/11 is called one of the u.s. government's key sources on al qaeda, likened to a rolodex of al qaeda. the c.i.a. has more documents that will show a link to waterboarding. separately, leon panetta has decided to cover the legal fees for agency employees arising from the attorney general's review, which could lead to criminal prosecutions. >> there is a delicious irony involved when you have u.s. government employees who may

be prosecuted by the u.s. government and they would be defended using u.s. taxpayer dollars. there is a lot of taxpayer dollars here. >> this move by director panetta is not unprecedented at the agency an seen by some within the intelligence community as further evidence of his opposition to the attorney general's decision. it is also seen as an effort by panetta to support his employees in a very visible way. shannon: i'm sure this is far from over. that entire interview can be seen on "fox news sunday" with chris wallace. check local listings for the time in your area. the release of the man convicted of bombing pan am flight 103 and his return home to libya did not come as a surprise to the u.s. government. there are questions about request the scottish and brittish governments signed off on it. james rosen looks at the politics behind a very controversial move. >> good evening to you. tory leaders in great britain are demanding that gordon brown's labor government release more information about

the high-level talks between brittish and libian leaders that took place earlier this summer. >> i was both angry an repulseed. >> brittish prime minister gordon brown spoke after the convicted pan am bomber was sent home to die from terminal prostrate cancer. gordon denies that he ok'ed the release in order to secure oil deals with lib ya, but did acknowledge wanted to forge better relations with tripoli. >> we want to work with countries even like libya who have renounced nuclear weapons and want to join the international community. >> the son of quk muammar qaddafi and his likely heir told a scottish newspaper said it was obvious when there was a transfer accord with the brittish government two years ago, it was seeking the release of al-h hevment grahi

and asked us to keep the reception low low-key. >> i had contact with scottish authorities, secretary of state clinton did as well. >> fox news has confirmed that u.s. attorney general eric holder warned the scottish authorities that he might receive a hero's welcome and fox news has learned that national security council john brennan tried to get the scots to reverse their decision, all to no avail. >> we tried to point out the injustice of such an act. the decision was ultimately made by scottish authorities to release him. >> in engelwood, new jersey, site of the libyan ambassador's residence where muammar qaddafi was expected to stay during his visit to the u.n. general assembly next month and where work crews have been busy refurbishing the growns so he could pitch the bedouin tent he uses when traveling, local officials have petitioned in the court to stop it.

>> they won't build their tent on our soil, and insult us in the wake of a hero's welcome that they gave to a convicted terrorist. >> state department officials tell us muammar qaddafi has given up on new jersey and is looking for a hotel in manhattan that has first floor space because he doesn't like elevators. shannon: thank you very much, james. how can a fashion statement be a political slap in the face to israel? we'll show you a little later. the folks who brought you the tea party rallies are leaded your way. we will told you what they are protesting this time. opportunity.

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shannon: the cash for clunkers program spurred a 2/10's of a point of increase personal spending for july. the dow boke an 8-day winning

streak, and the s&p 500 dropped 2 and the nasdaq gained 1. folks upset about big government are going to keep on trucking into your town, maybe. their grassroots tour got underway in california and it's supposed to snowball all the way to washington, d.c. correspondent william la jeunesse is at the starting point in sacremento. >> 16 days, 34 cities, 7,000 miles, the tea party express set out from sacremento friday on its way to washington, d.c.. >> we're regulated to death here.everything is scared of death. >> a caravan of buses, r.v. he's and tractors carry a message of discontent with an overreaching federal government that is mismanaged and corrupt. >> we have no jobs. i haven't worked all year. >> our freedom and liberty is at stake. >> this is round two for the anti-tax group which made headlines in april when

thousands protested the spending bill. many are self described conservative but some democrats are onboard, too. >> we have libertarians, democrats, republicans. there is everybody here. >> many here today are protesting federal an state policies, regulations that are cutting off irrigation water to farmers to protect fish and new emission standards that truckers say will take older diesel trucks an tractors and their drivers off the road. >> overregulation. we need to downsize the government. congress is being ran by environmental groups and special interests. it needs to be changed. >> liberal opinion makers call the tea parties staged, fake events masterminded by republican operatives. even some democrats admit the movement could not have come this far from the g.o.p. he's will alone. >> you can be the best organizer in the world, and i have met some and hired some, but if you don't have a message that has got some sail yens to it i don't care how

much money you put behind it, it goes nowhere. >> and the message is going across the country, one city at a time on its way to capitol hill. in sacremento, fox news. shannon: republican governor charlie crist has appointed his former chief of staff to replace george martinez. george lemieux will fill the seat. crist is running for that senate seat himself in next year's election. one of the mainstream media's charter members says president obama made a wong headed decision and the head tax writer in the how house finds a little bit of lost money, say, around $3 million. upbeat rock ♪ singer:wanted to get myself a new cell phone ♪

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just twenty bucks-every day. genuine food. generous portions. genius price. 2 for $20! only at applebee's. shannon: now the latest from the political grapevine. house ways and means committee chairman charles rangel has revealed his net worth was double what he originally said it was. the democrat are from new york is already under investigation for tax and financial issues. rangel's amended forms include previously undisclosed assets worth as much as $780,000, including an omitted checking account worth up to a half million, and unreported investment portfolios up to $50,000 and another find of $100,000. the new york post said he failed to reveal $3 million in

business transactions between 23002 and 2006, including up to a million from the sale of a harlem building that city records show he still owns. rangel's office tells the wall street journal that he is now confident the amended records are accurate. "the washington post" editorial board is calling out president obama on what it calls his wrong-headed decision to end the d.c. school voucher program. the newspaper cites research by education expert patrick wolf, who says the program has, quote, proven to be the most effective education policy evaluated by the federal government's official education research arm so far. the president of belarus is admitting he rigged the last presidential election in favor of his opponent. he said his popularity is so vast that the true election numbers had to be lowered. "i gave the order for it to not be 93% but something around 80, because something

over 90 is not accepted psychologically." he has led the former soviet republic country since 1994 and is blasted as a dictator for authoritarian rules. the prime minister of its hadly is suing over a or thing of his stormy personal life. the media has focused on his affairs with young women and deterioration of his second marriage. today the prime minister was supposed to attend an annual forgiveness of sins observance along with the vatican's number two and then have dinner with him but the vatican cancelled the dinner and berlusconi's office confirmed he wouldn't go at all. an american service member was killed today in a bomb blast in afghanistan making august the deadliest month for u.s. forces since the war began. jennifer given reports on a growing dissatisfaction among the troops with one of the rules they have to live and possibly die by.

>> not only did u.s. forces in afghanistan inherit an enemy they cannot see, but now these troops are finding they are required to hand over insurgents to afghan authorities within 96 hours or release them. according to a restrictive rule agreed to by nato member states an inherented by general stanley mcchrystal. according to one top u.s. commander in afghanistan, quote, it is a big limitation in counterinsurgency operations not being able to detain individuals to conduct interrogations and follow up with exploitation is something restrictive, something we didn't have to worry about in iraq." >> this 96-hour nato ule is driving the troops nuts. they call it the revolving door problem. it goes like this. they will capture a prisoner. they have 96 hours to turn him over to the afghan authorities. >> marines in southern helmand province are balking and

stalling and refusing to send helicopters to pick up a detainee, knowing he will be released. >> the problem with that, particularly in the south, is that often it is a 24-hour effort just to get a prisoner by hell copper tore to the afghn authorities. in addition to that, the troops don't have enough time to interrogate these prisoners when they follow the rules, and so what happens all too often is they will take a prisoner who knows something an put him on a helicopter and watch the information fly away. it's absolutely outrageous. >> a marine spokesman in afghanistan adds "the logistics of transporting materiel and people are time challenging so the time sensitive requirement adds to a challenging situation that is already tough." mcchrystal's strategy review will be reviewed by the pentagon next week but it does not demand the 96-hour rule be changed even though it hamper pz u.s. troops' ability to

fight and win. jennifer griffin, fox news. shannon: in other news around the world, a pakistani court has ordered the government to temporarily lift restrictions on a scientist who admitted spreading nuclear technology to north korea and lib ya. he has had to keep authorities abreast since being released in february. judges will review his case again next month. iranian president ahmadinejad is calling for the prs cushion of opposition leaders, hundreds of thousands have protested since ahmadinejad's re-election in june. earlier this week, quk quk said he saw ayatollah khomeini said he so no opposition, a charge hardliners have repeatedly made. the nuclear agency with the u.n. says iran is not cooperating concerning their alleged nuclear weapons program. in israel, there are rye brows raised over, of all things, women's dresses. some of the most popular ones

are designed by a palestinian bombing conspirator sitting in an israeli prison. mike tobin has an unusual dress for success story. >> the fashions have become the rage among arab women, particularly those in the palestinian territories. the designer is serving six life sentences in an israeli prison for his work prior to fashion design. as an operative for hamas, he drove the bomber who detonated on tel aviv bus number four in septemberç 2002, killing six people. he was also convicted for driving another bomber who failed to detonate. with open arms, he is welcomed into the family garment business. >> so the family regularly visits him in prison. during those visits, he coaches them on new dress designs. occasionally, he will mail a sketch. his ideas become garments for religious women, and sexy

clothes to be worn only in the house. the customers don't consider his past when buying. >> i like this dress, because it's beautiful, and the designer is not important. >> some do consider the designer's past, and this man stands on the spot where the bomb delivered by the designer killed his mother. >> i think he should kill himself. that's what i think. >> what is not widely known on the street is that he also makes clothes for religious jews, with is similar modest yet pretty design philosophy in a family business that keeps the costs down, his clothes make their way into jewish orthodox neighborhoods. >> they would care if they knew it was from him in the jail. >> a relationship that is possible for his entire family business, painful for another, a relationship that could only happen in the middle east.

in ramallah, mike tobin, fox news. shannon: "special report" will be live from jerusalem monday. join bret for the special broadcast at 6:00 p.m. eastern featuring an interview with shimon perez. dick cheney speaks out on the obama administration's pursuit of c.i.a. agents who interrogated terror suspects. the fox all-stars react when we come back. -% gecko vo: you see, it's not just telling people geico could save 'em hundreds on car insurance. it's actually doing it. gecko vo: businessmen say "hard work equals success."

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>> the approach of the obama administration should be to come to the people involved in the policy and say how did you do it? what were the keys to keeping us safe over that period of time? instead they're threatening to disbar the lawyers who gave us the legal opinions an threatening contrary to what the president originally said they would go out and investigate the c.i.a. personnel who carried out those investigations. shannon: that was former vice president dick cheney telling chris wallace exactly what he thinks about the justice department's criminal investigation into alleged

abuses by c.i.a. interrogators. let's get reaction from our panel. fred barnes, executive editor of the weekly standard, juan williams for national public radio and syndicated columnist charles krauthammer. welcome all. fred, i will start with you. as the former vice president suggested, the obama administration should go to the interrogators and ask for their advice, that's not going to happen but where do you think the administration goes with this now? >> they are going forward with an investigation to see if they want to prosecute and criminally indict the c.i.a. interrogators and i believe they are remass claiting the the^ -- they are emasculating the entire c.i.a. intelligence gathering group. leon pan panetta has suffered more losses this year than the washington nationals baseball team. there is supposed to be some tension inside the administration, but yet he has lost every fight to the justice department and attorney general eric holder.

i don't see how he can stay in the administration much longer. i mean, the c.i.a. no longer even has the obligation of actually interrogating, doing the interrogation of terror suspects anymore. that has gone to the f.b.i. the other thing you have to remember is this is not a new case. you know, there was a task force in the justice department in the bush administration done by the full-time professional prosecutors who looked into all the interrogations by the c.i.a. interrogators and said there is not enough evidence, that there would be no conviction here, and that the case should be dropped. this case is being reopened by eric holder, and i think entirely for political reasons. shannon: as we're learning more and more about what happened behind the scenes to this point, what do you make of the way it was handled by the administration? >> well, there is a great deal of reports that indicate there is a civil war within the administration over this

topic. the key players would be c.i.a. director panetta and attorney general eric holder, holder feeling that he has to represent the notion that you follow the facts an enforce the law with that favor, but with leon panetta making the case that listen, the administration and in particular, rahm emanuel had said that the administration wasn't interested in pursuing legal action against the c.i.a. operatives who were engaged in these interrogations, but in specific response to vice president cheney who said the administration should be coming to people and asking for advice, i would say it is a two-way street. instead of saying the country is less safe, which he said a while back, under the obama administration, he should be offering up information himself and saying we understand there were problems and they were a real problem in terms of violating u.s. laws against torture. shannon: charles, the players here, who survives? fred suggests maybe panetta won't. what do you make of this? >> he is completely

marginalized. juan said it is a civil war. if it is, we have seen that it is over. panetta handed over his sword. everything he has fought over he has lost, and these aren't just marginal ter tore qual turf disputes. these are cror interests. number one, he released of documents and twice he lost on that. secondly he opposed the appointment of a prosecutor. a prosecutor has just been appointed and lastly, the interrogation of high-level enemy terrorists has been removed from the c.i.a. it's now in the hands of the f.b.i. and white house. now, what's left? signal intelligence is n.s.a. not f.b.i. human intelligence, not c.i.a. anymore. it's in the f.b.i. and the white house, so it is central intelligence, but it doesn't gather intelligence. all that's left is analyzing intelligence. well, you don't need $30

billion a year for analysis. you can hire the rand corporation who will do it at 1/100th of the cost and save billions that you wasted on the cash for clunkers an purchased every secondhanded car in america. this is a real institutional problem. what has happened is that the obama administration has relegated the c.i.a. to the role it had pre-9/11 and we know what that resulted in. shannon: and there wasn't great dmiewn case -- there wasn't great communication between the agencies then. do you see the walls going back? up? >> especially with a special prosecutor appointed by holder with no new evidence. it was investigated by the justice department before fully. they came to a conclusion. now that conclusion is being upset by eric holder. it does tell you something about the obama administration. i think holder would not be

moving ahead on this, and i think you will agree, juan, unless the president agreed. if he didn't agree, he would tell him not to do it, because it is not just that there are flu facts out there that holder has to pursue.they are r. this is being done, i assume, with president obama's full approval. >> well, there is a difference between approval and not telling him to stop. i think that president obama's position is the attorney general should be an independent force when it comes to the law, that the problem the bush administration got into was when it was perceived that alberto gonzalez was following marching orders coming from the white house. i might add there is a problem with politicization of the c.i.a. don't forget the arguments about whether or not the vice president cheney and others were demanding that the c.i.a. give them certain information to justify pre-existing ideas. >> juan, we know that's not true! >> but that is the whole notion of politicization if you want to get into the

c.i.a. and their problems. steve pressman, the c.i.a. lawyer went to holder directly and said to him, these things have been investigated, as fred said, and they have been found not to be the basis for further investigation. why do we need holder to come in at this time and start a new investigation? apparently holder is of the mind that congress will have their own investigation, and you can't have the administration get caught a step behind while congress is running off, and this possibly could be a moderating force. >> you have career prosecutors who have looked at this and decided it was not something you would want to prosecute, and they are not political, and you have no new evidence, as everybody agrees, then you have to assume that the holder decision itself is political, and obama, as president, ought to exercise authority over a political decision like that in the name of the national interests. he pretends it is out of his hands. it is not. it is in his hands and his pre-tension is cynical and cowardly.

shannon: we will have more coming up. an unwelcome dictator, the deadliest month in afghanistan and who is willing to fill ted kennedy's shoes? all that coming up with the panel in the lightning round. (announcer) this is nine generations of the world's most revered luxury sedan. this is a history of over 50,000 crash-tested cars... this is the world record for longevity and endurance. and one of the most technologically advanced automobiles on the planet. this is the 9th generation e-class. this is mercedes-benz. welcome to progressive. how may i help you? i'm looking for a deal on car insurance. i think i might have a coupon in here. there's an easier way. we've got the "name your price" option. you do? follow me. you tell us how much you want to pay, and we'll build you a policy that fits your budget.

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